CD&R could pull in $14bn for new buyout fund

Clayton Dubilier & Rice could collect about $14bn for its largest buyout fund to date, surpassing its fundraising goal, according to people familiar with the matter.

While the firm has reached its $13bn target for its 11th flagship fund, it is still raising money for the new vehicle, the people added. Fundraising is expected to wrap up around year-end but could continue into early next year to accommodate investors aiming to make commitments in 2021, they said.

Another $1bn or so of commitments are expected for Clayton, Dubilier & Rice Fund XI before the fund closes, the people said. The firm has said it received the first commitment to the fund in early April and had raised nearly $12bn by early last month, WSJ Pro Private Equity has reported.

Among investors that have disclosed commitments to the 11th fund are the California Public Employees’ Retirement System, or Calpers, which pledged $500m, and the South Carolina Retirement System Investment Commission, which put up $75m, WSJ Pro Private Equity data show. Calpers also backed the firm’s predecessor fund, pension documents show.

Founded in 1978, the New York-based firm invests across North America and Europe, focusing on businesses in the healthcare, consumer and retail, industrial and services sectors, according to its website. The firm focuses on acquiring non-core corporate divisions and founder-owned and family enterprises in transition. It managed $23.47bn in client assets at the end of last year, a regulatory filing shows.

So far, the fund has raised 30% more than its predecessor, Clayton Dubilier & Rice Fund X, which closed in 2017 with $10bn. It collected $6.25bn for its ninth buyout fund in 2014.

If the latest vehicle wraps up fundraising by year-end, it would join the 962 funds that have closed during pandemic-stricken 2020 through 16 October to raise $419.8bn, according to data provider Preqin. By comparison, 1,339 funds had closed at the same point in 2019, collecting $524.8bn.

In addition to its fundraising, CD&R has been busy on the mergers and acquisitions front. Since March, the firm has announced or closed nine deals, six of them new platform companies.

Last week, the firm said it had closed its acquisition of Epicor Software from KKR in a deal valued at $4.7bn, including the Austin, Texas-based company’s debt.

In August, the firm said it had agreed to back the creation of a building materials company with a value of about $4 billion by combining HD Supply Holdings Inc.’s White Cap construction and industrial business with Construction Supply Group. CD&R now holds a 65% majority stake in the company, with Sterling Group and other investors holding the remaining 35%.

Source: Wall Street Journal